Whether driving your car or managing your program, does the
absence of catastrophic loss mean there is no risk? NO! It means one
of two things: your risk management system has
integrity and you are managing your risks superbly; or you got
away with a few that you shouldn’t have.
The difference between loss and risk is often miniscule. We have to be
honest when we ask ourselves which one it is.
Lack of loss can easily lead to complacency.
When pressure is added, compromise can follow quickly.
The Challenger accident (see Recommended Reading) is a perfect example:
NASA had one of the best safety systems in the world but, under pressure, it
compromised and let its guard down. Complacency is the front door to catastrophe
and pressure is the back door. Risk
Scenarios are a great way to stay identify the issues without taking real
chances with lives, money or reputations.
5 Essential Steps to Managing Risk:
- State your Definitions.
- Identify the Issues to which you are exposed.
- Brainstorm cost/effective Solutions.
- Make Decisions on which solutions best satisfy your objectives.
- Implement and monitor Controls
“If you wish to converse with me, define your terms,”
said Voltaire. Our assumptions
They limit us. They can also
kill people. Ambiguity is another
major source of risk. Tasks,
properly defined, are already half done. The
picture in your head must be the same as those in the heads of others!
Critical definitions include: objectives,
assumptions, principles, processes and acceptable standards.
Defining things twice is often useful – stating what you
want and what you don’t want. Paraphrasing,
written confirmation, drawings, models, trial runs, etc. all reduce the chance
that things will go awry.
“The least initial deviation from the truth is
multiplied later a thousand fold.” Aristotle
said 2,400 years ago. Today,
it still takes time and requires extra thought, but it soon pays dividends.
Bottom Line: Take the time to define your terms!
This sociology professor examines the pressures that caused
NASA to compromise its high standards, to normalize deviance and ignore clear
warnings that produced an unforgettable national tragedy.
At 500 pages, it’s not
light reading, but you’ll find it lists many of the dysfunctional behavioural
patterns that you should avoid in your organization. Highly recommended.
Available at better book stores.
Just drop us an e-mail, fax or call.
Risk Solutions offered by CADMUS:
Murphy spent 17 years (78-96) with Transport Canada, his last five as Regional Director General, Aviation in Winnipeg
Available in Word 97 by email or by fax from):
e-mail: Michael Murphy
CADMUS Corporate Solutions Limited, Nepean, Ontario
Tel. (613) 829-0602 Fax (613) 829-6720
Home How we developed our risk management process
Process Step 1 Step 2 Step 3 Step 4 Step 5 For Senior Executives
How to contact CADMUS About our President
© 1999 CADMUS Corporate Solutions Limited